Endowment insurance and Whole Life Insurance in Nigeria

It is important to know what your contract entails in details in endowment insurance basics. This helps in signing an endowment policy to escape getting caught in any disappointing shocks when tragedy occurs. The Important factors to consider when obtaining an endowment insurance policy include length and terms of coverage, the paybacks at its maturity, the rate of investment and the bonuses you will pay.

Endowment insurance vs. life insurance

Most endowment insurance agreements are regarded as an investment product that you obtain from a life assurance company. Life assurance is simply a decorative word for life insurance. This implies that they will pay out if you die through the term of your policy.

Whole life insurance plans are not to be muddled with endowment insurance. The key difference between an endowment policy and life insurance is that an endowment policy will pay the face amount of the contract as its assured sum. This fee is made upon the death of the insured or on a fixed date, whichever occurs first.

Endowment policies only deliver coverage for a definite number of years and are much diminutive than life insurance policies. Whereas, life insurance plan, the payout only happens upon the insured’s death. Life insurance plans are often stated as whole life insurance plans because they can span a whole lifetime, up to a certain age.

The perfect gift

Endowment insurance can be procured as an investment, a method of protection for your family in case of unexpected death or serious illness. This is a gift or package for one’s future planning or as a savings plan. This can be paid in full to you when the policy extends its full maturity.

Maturity lengths

Endowment insurance agreements are planned to mature a specific amount of money after an agreed maturity date is reached. Distinctive maturity lengths fixed upon with most endowment policies are ten or twenty years up to a certain age limit.

Once the full duration of time has been reached and the policy has developed, if the policyholder is still alive, they may cash in their policy. In this way, endowment insurance can be viewed as a savings plan.

Premiums

Premiums fee for an endowment policy is much bigger than those paid for an entire life policy. There is a much quicker buildup of cash funds because of the higher premiums is related to endowment insurance.

Due to the restricted amount of time associated with this form of policy it acts as a forced savings account, often used for stepping down or to fund a child’s education.

Whole life insurance policies are more likely obtained to protect a spouse, help beneficiaries pay inheritance taxes etc.

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